Supplier Fraud & Global Trade

Alibaba CEO resigns due to Gold Supplier fraud

2011-02-24T20:08:00.000-08:00

The recent news proved what we at iSafeTrade.com have known for a long time: you can't trust Alibaba Gold Suppliers:

Forbes: Forbes Blog Post
Wall Street Journal Article

We have known this because, in the process of doing our investigation of suppliers as part of our iSafeTrade Supplier Verification Reports we've found people on Alibaba with Gold Supplier who are imperosnating legitimate companies (and therefore able to get Gold Supplier status) although they are not actually affiliated with the company. I've written about this in the past here: Alibaba Gold Supplier and TrustPass Impersonators

Recover Funds from a Fraudulent Supplier

2010-06-23T18:28:00.001-07:00

We offer Supplier Verification Reports to help importers and people sourcing from overseas to avoid being defrauded. Nevertheless, we frequently receive emails from buyers who have already sent funds to a fraudulent supplier. So, we've decided to try to offer assistance to buyers who have already been cheated. Learn more here: How to Report a Fraudulent Supplier (Scam Company)

Posted via email from isafetrade's posterous

On-Site Verification Services: Factory Audits, Product Inspection, and Quality Control

2010-04-19T13:28:00.000-07:00

If you are sourcing products from Asia and you want a qualified verification agent to perform on-site inspection services, how do you find them and how do you find the right price?

At iSafeTrade.com, we're now offering a marketplace for services where you can receive bids and quotes from multiple, qualified service providers for on-site services. You will be sent quotes from each service provider and you can choose which one, if any, meet your needs. This is all provided to you entirely free of charge.

Alibaba Gold Supplier and TrustPass Impersonators

2010-02-23T19:03:00.000-08:00

There are many examples of fraudulent suppliers with Alibaba Trustpass or Gold Supplier status (here, here, here). If these suppliers are supposed to verified by an third party verification service, then why are there so many scammers with this "trusted" status? Let me explain why this is happening...

Here is an example of a scam we try to detect:
1. A scammer finds a legally registered Chinese company which has been in business for many years but doesn't do foreign trade (and therefore doesn't have an Alibaba profile).
2. Obtains a copy of the Chinese business registration certificate and related documents (for example, by approaching the company as a prospective customer).
3. Sends this to Alibaba to obtain a Trustpass / Gold Supplier status in the name of that company.

An unsuspecting Western buyer then finds this Alibaba Gold Supplier and assumes it's safe to trade with given its Trustpass or Gold Supplier status. Only later do they discover the person who created the Alibaba profile was only impersonating as a real company. Alibaba's third party verification services don't really detect this. Alibaba's third party verification service just verifies that the company is legally registered and do not verify that the person requesting the Trustpas or Gold Supplier status really works for the company.

Learn more about iSafeTrade's Supplier Verification Reports

Trade Experts page added to iSafeTade

2010-02-14T18:25:00.000-08:00

Added new Trade Experts on iSafeTrade.

Articles by Klaus-Dieter Hanke:

Articles by Rosemary Coates:

Latest scam reports and supplier reviews

2010-01-07T13:42:00.001-08:00

You can view these for free (no registration required):
biowater-consult
chengdu-jiarui-trade
china-mtu-wholesale
china-resources-electronic
chongqing-yuzhong-district-westem-test-apparatus
crowning-trade
daniel-international-group
electronics-supplier
explorer-trade
fengwen-trading
forayt
gold-legend-rich-international
green-house-trade
guangzhou-city-baiyun-district-tonghe-baowan-clothes-store
guangzhou-tongshun-new-energy-science-and-technology
hyun-cool
jiangyin-borun-new-energy-science-and-technology
jinan-jierong-commercial-and-trade
jinan-molu-trading
jing-kou-jewelry
jinhua-meiqi-import-and-export
joy-trade-enterrise-joy-summit-enterprise
kai-jun-industry
mentor-international-electronics
peng-sing-electronic-components
shandong-haotian-bearing-import-and-export
shenzhen-newcom-technology
shijiazhuang-aimeite-chemical
shijiazhuang-ally-sage-trading
shijiazhuang-tianchang-tech
sunyong-private-enterprise
tongjie-industry
widget2010
xiamen-tiatrade
yashulai
yuanhua-international-trade
zhengzhou-zongyuan-technology-and-trade

Free tool to check a supplier's website

2009-12-31T23:32:00.001-08:00

To help people avoid being scammed by fraudulent suppliers, we created a free tool to check a suppliers website:
http://www.isafetrade.com/supplier-website-check

Using this tool you can check how long ago the supplier's website was created and where the website is located. If the website was created within the last one or two months, you should be suspicious.

For example, here is a suspicious supplier:
http://www.isafetrade.com/supplier-website-check?query=www.well-hot.com

iSafeTrade Sitemap

2009-12-31T20:20:00.001-08:00

For your convenience, here are the iSafeTrade™ feeds...

Verify a Chinese supplier (check business registration records)
Verify a Hong Kong supplier (check business registration records)
Verify a Taiwan supplier (check business registration records)

Directory:
Latest Trade Leads (Buying and Selling)
Latest Suppliers and Manufacturers
Latest Supplier Reviews and Scam Reports
Latest Service Providers (Agents, Third Party Logistics 3PL)

RSS:
Latest Trade Leads (Buying and Selling)
Latest Suppliers, Manufacturers and Service Providers Reports
Latest Supplier Reviews and Scam Reports

New features: Trade leads and website check

2009-12-22T17:35:00.000-08:00

We redesigned the home page so that you can do most activities from the home page: http://www.iSafeTrade.com

1. Users can create buying leads and selling leads for free. These are displayed on the home page. Only suppliers with high reputation scores (at least 6/10) are able to respond to buying leads.

2. You can see the latest trade leads, scam reports, and company reviews from the home page.

3. We've added the ability to check a website's domain and geographic information when you search for a company by website:
http://www.iSafeTrade.com/search?category=company&subcategory=website

If we don't already have the company in our database, we'll provide the information for who registered the website, when the website was created, and where the website is located.

If you encounter any problems or have any suggestions, please let us know (staff@isafetrade.com).

Updated whitepaper

2009-12-10T01:25:00.001-08:00

http://www.isafetrade.com/iSafeTrade-whitepaper.pdf

2/3 of BIS penalties for trade with parties on U.S. blacklists

2009-12-02T21:08:00.000-08:00

At the Bureau of Industry and Security (BIS) 2009 Export Controls & Policy conference, Acting Assistant Secretary Kevin Delli-Colli said two-thirds of BIS penalties since 2000 were for trade with parties who were (1) subject to export administration controls or (2) on the BIS's Entities List or Denied Parties List. He said the takeaway is that greater due diligence is needed.

One of the free features iSafeTrade.com offers to American exporters is an easy and convenient way to search U.S. restricted parties lists:
http://www.iSafeTrade.com/search?category=restricted

Restricted parties in Cuba:
http://www.isafetrade.com/search?querytype=restricted.address&query=cuba

Restricted parties in Iran:
http://www.isafetrade.com/search?querytype=restricted.address&query=iran

Video here: http://bisecp.videohostpro.com/13/softvnetplayer.htm

If you have any questions, please contact staff@isafetrade.com.

New on iSafeTrade: Premium Searches

2009-11-30T21:49:00.000-08:00

We've also added premium search capabilities, so you can now search for product suppliers within a specific geographic region:
http://www.iSafeTrade.com/premiumsearch

For example, here is a list of importers/exporters of batteries in Mexico:
http://www.isafetrade.com/premiumsearch?category=company&name_query=&address_query=mexico&product_query=batteries+battery&limit=25&commit=SEARCH

iSafeTrade.com's LinkedIn Group

2009-11-29T16:37:00.001-08:00

I setup a group on LinkedIn for iSafeTrade.com:
http://www.linkedin.com/groups?gid=2534575

We'll use this group to discuss topics such as international supplier fraud, propose new features for our website, and solicit feedback from our users.

If these topics are of interest to you, feel free to join the group. Membership is open.

30 New Fraudulent Suppliers This Week

2009-11-29T14:20:00.000-08:00

Thirty new scam reports on fraudulent suppliers/manufacturers added this week:
http://www.iSafeTrade.com/scams

You can post your own scam reports and company reviews here:
http://www.iSafeTrade.com/companies/new?writereview=true

You can search for suppliers (both legitimate and fraudulent) here:
http://www.iSafeTrade.com/search

For help, contact support@isafetrade.com.

Find U.S. Facilities

2009-11-28T11:17:00.000-08:00

The U.S. Customs and Border Patrol (CBP) maintains a list of facilities by FIRMS code. FIRMS means Facilities Information Resource Management. It contains a list of bonded warehouses, container freigh stations, warehouse deconsolidators, foreign trade zones (FTZs), etc.

To make it easier to find U.S. facilities, we have made this easily searhable on iSafeTrade:
http://www.iSafeTrade.com/search?category=facility

For example, search for "Federal Express" to get a list of Federal Express facilities.

U.S. Trade Compliance: EAR and OFAC Compliance

2009-11-28T10:59:00.000-08:00

American exporters have legal obligations to avoid doing business with certain kinds of foreign businesses. The Bureau of Industry and Security (BIS) has a convenient reference:
http://www.bis.doc.gov/complianceandenforcement/liststocheck.htm

These lists are maintained by separate departments of the U.S. government and compliance can be quite challenging for exporters. To make this easier, iSafeTrade.com has made it possible to search all of these lists automatically. These lists can be searched from here:
http://www.iSafeTrade.com/search?category=restricted
Example: search for "Empresa Cubana de Aviacion"

1. The Department of Treasury's Office of Foreign Assets Control (OFAC) administers trade sanctions. They maintain the Specially Desiginated Nationals (SDN) list.

2. Licensing requires under the Export Administration Regulations (EAR) can be triggered by certain companies/people. This list is called the "Entity List" and is maintained by BIS.

3. The State Department administers International Traffic in Arms Regulations (ITAR). The list of companies/persons who barred under ITAR is called the "Debarred List."

4. The State Department administers a list of various sanctions programs (Section 744 of the EAR).

5. The BIS maintains Denied Persons List (DPL) which is a list of people that Americans should avoid doing business with.

6. The BIS also maintains the Unverified List which are a list of companies/people that will cause problems to trade with.

Database of Export Administration Regulations (EAR):
http://www.gpo.gov/bis/ear/ear_data.html

iSafeTrade.com: Bringing trust to global trade

2009-11-20T18:12:00.000-08:00

iSafeTrade.com is the leading rating agency for international trade. We provide an unbiased reputation score for suppliers, buyers, and agents. The iSafeTrade Reputation Score is derived from user ratings and reviews, trade history and shipments records, and reliable data sources.

Verify Your Suppliers

Information is the key to minimizing risk. We provide the trade history and user reviews of a supplier. We have over two million suppliers in our database. If your supplier has made international shipments within the past few years, we should have them in our database. If you cannot any records about the company in our database, it doesn't mean they are not a legitimate company, but you should investigate them more thoroughly.

This is an example of a company profile with shipment records:
http://www.isafetrade.com/public/walmart

Find Trusted Suppliers

iSafeTrade.com is a search engine for verifying suppliers using past trade history and user reviews. iSafeTrade contains trade history for over 2 million suppliers. You can search for suppliers by name, address, industry or product, by contact person, etc.
You can also search for scam reports (customer complaints). If a customer feels they were cheated by a company, they can report it on our site and also report the person's name, phone number, etc. So if the fraudulent company tries to change their company name, you can still discover the previous scam report using other information.

Report Scams and Fraudulent Companies

If you have been cheated by a fraudulent overseas company, there is often not much legal recourse. The company you were dealing with may not even exist. With iSafeTrade, you can report the fraudulent company and prevent other users from getting scammed. Report any information you have about the fraudulent company and people involved (Western Union number, Paypal ID, MSN or Skype ID, the person's name, etc.). People can locate your scam report using any of that information.

Here is a sample scam report.

Promote Your Company

Companies can promote themselves by creating a free profile and requesting testimonials from satisfied customers. Trustworthy companies can greatly increase their online reputation by using iSafeTrade. When a customer writes a testimonial for your company, it will be visible to other users and also increase your iSafeTrade Reputation Score.

In addition, your company can create a "public profile." A public profile can be viewed by anyone (even if the person does not have an iSafeTrade account). You can show your iSafeTrade Public Profile to prospective customers and they can see your previous customers' testimonials and also learn more about your company.

This is Walmart's Public Profile: http://www.isafetrade.com/public/walmart

Contact

Your feedback is welcome: staff@isafetrade.com

Startup legal issues: Terms of Service amendments

2009-10-12T11:08:00.001-07:00

Many websites have Terms of Service that say something to the effect of "We reserve the right to amend this Agreement at any time and without notice." I would argue this kind of language is dangerous and may cause your Terms of Service to be entirely invalid. Why? Because a Terms of Service agreement is basically a contract, and a contract where one party can arbitrarily change the terms of the contract may be considered illusory.

In the Harris v. Blockbuster case earlier this year, the Terms of Service were found to illusory because Blockbuster could arbitrarily change the terms and they would take effect upon posting. To quote from the decision:

The Court concludes that the Blockbuster arbitration provision is illusory for the same reasons as that in Morrison. Here, as in Morrison, there is nothing in the Terms and Conditions that prevents Blockbuster from unilaterally changing any part of the contract other than providing that such changes will not take effect until posted on the website. There are likewise no “Halliburton type savings clauses,” as there is “nothing to suggest that once published the amendment would be inapplicable to disputes arising, or arising out of events occurring, before such publication.” The Fifth Circuit in Morrison noted the lack of an “express exemption” of the ability to unilaterally modify all rules, which the Blockbuster agreement also does not contain. The Blockbuster contract only states that modifications “will be effective immediately upon posting,” and the natural reading of that clause does not limit application of the modifications to earlier disputes.

There seems to be no fail-proof way to avoid this. As a reasonable best practice, consider using an approach similar the following:

Give a reasonable time period after you post the change to the Terms of Service before they take effect (such as one week).
Keep a history of changes at the bottom of the Terms of Service which summarizes the change (it's unreasonable if the user needs to reread the entire Terms of Service to spot the change).
In addition to posting it on the website, email users (if you have their email address) and provide an RSS feed so users can opt-in to see changes (without having to provide their email address).

Hat tip to Eric Goldman

Startup legal issues: DMCA safe harbor exemption

2009-10-12T10:59:00.000-07:00

The Digital Millenium Copyright Act has a safe harbor provision for service providers for copyright infringement (see 17 USC 512). These safe harbor exemptions are very important for companies which archive information (e.g., Google) and utilize user-generated content (e.g., YouTube and Yelp). The service provider is not directly liable if they meet *all* of the conditions for exemption. If a service provider fails to meet any of the conditions, then the safe harbor exemption does not apply, end of story.

Many people seem to know the general conditions for exemption outlined in Section 512(c). A service provider shall not be liable ... if the service provider:
(A)
(i) does not have actual knowledge that the material or an activity using the material on the system or network is infringing;
(ii) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; or
(iii) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material;
(B) does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity; and
(C) upon notification of claimed infringement as described in paragraph (3), responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity.

However, a lesser known one seems to be the requirement to file an Interim Designation of Agent to Receive Notification of Claimed Infringement with the Register of Copyrights.

Section 512(c)(2) is very clear on this:
(2) Designated agent.— The limitations on liability established in this subsection apply to a service provider only if the service provider has designated an agent to receive notifications of claimed infringement described in paragraph (3), by making available through its service, including on its website in a location accessible to the public, and by providing to the Copyright Office, substantially the following information:
(A) the name, address, phone number, and electronic mail address of the agent.
(B) other contact information which the Register of Copyrights may deem appropriate.

Side note: There is some debate if service providers are exempt from any liability (direct, contributory, or vicarious liability) for copyright infringement, or if they are only exempt from direct liability.

Hat tip to Eric Goldman